Senate Energy Debate is Still all About Cap-and-Trade

The Obama administration and Democratic congressional leadership, seeing their window for shoving the country to the hard left closing quickly, are intent on making one last major push for cap-and-trade. It starts with their “spill-response bill” or “energy bill,” but it’s really about cap-and-trade.

The irony is that the political genius of cap-and-trade was supposed to be that it hides a tax hike from the American people.

The concept was developed largely as a response to the political price suffered by Democrats for their advocacy of outright energy taxes. As Al Gore explained: “I worked as vice-president to enact a carbon tax. Clinton indulged me against the advice of his economic team. That contributed to our losing Congress two years later to Newt Gingrich.”

Enter cap-and-trade: the code-worded way to impose a massive energy tax and pretend it's not a tax. The political “innovation” of cap-and-trade is that instead of levying a tax directly, it puts a cap on overall greenhouse gas emissions, and establishes a market for companies to buy and sell the permits.

So it’s a tax with the added uncertainty of the tax rate being set at auction, making it a tax with an unknown rate. The Congressional Budget Office scored the House-passed Waxman-Markey bill as an $846 billion tax hike. They also admitted the costs will be passed onto consumers in higher prices.

It was supposed to be a hidden tax, but the American people broke the code. They know about cap-and-trade. They know it’s a huge tax hike and they don’t want it. Support is crumbling. So cap-and-trade true-believers turn to even deeper subterfuge.

The Senate will take up energy legislation next week and pretend it’s not about cap-and-trade. Democratic leadership had already scaled back the cap-and-trade provisions to just power plants (still enough to, as President Obama explained, cause electricity prices to “necessarily skyrocket”) and now have reportedly removed cap-and-trade completely -- temporarily -- although it remains the centerpiece of their real plan.

The key first step of the plan is to get something, anything, related to energy passed through the Senate. That will get it into a conference committee – likely an informal, backroom, secret one – where it can be “merged” with the House-passed Waxman-Markey bill.

The lead author of that bill, Henry Waxman, is openly telling reporters that at that stage he will reinsert the full-blown cap-and-trade program.

Both as a function of the legislative calendar and of electoral politics, neither the House nor Senate is likely to vote on the conference report before the election. It will instead, Senate cap-and-trade point man John Kerry has said, be considered in a lame duck session of Congress.

A lame duck session is a session of the old Congress – including those who have already lost re-election – convened after the election but before the newly-elected Congress can be sworn in.

If it gets that far it may be difficult to stop. It could depend on bringing pressure to bear on moderate Republicans like Olympia Snowe and Susan Collins of Maine, Scott Brown of Massachusetts, and Mike Castle of Delaware (who will likely win a special election and be seated in time for the lame duck session) to make a firm commitment not to support cap-and-trade in the lame duck.

This would be about process more than policy – a simple stand that establishing far-reaching, expensive new programs should not be considered until after all of the duly-elected senators have been seated and the new Congress has started.

The best, surest way to derail the lame duck strategy is to prevent the Senate from passing any energy bill before the election that could get them into conference.

That’s why the energy debate in the Senate next week is so high stakes. It’s really all about cap-and-trade, and senators who vote yes will have to explain to angry constituents why they voted to advance cap-and-trade and cause energy prices to skyrocket.

Phil Kerpen is vice president for policy at Americans for Prosperity, which runs the www.RegulationReality.com project on the EPA power grab. He can be reached on Twitter, Facebook, and through www.PhilKerpen.com.

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Phil Kerpen is the founder of American Commitment Action Fund, on the web at www.BookerFAIL.com.